Paycom Software Earnings: What To Look For From PAYC

Radek Strnad /
2022/02/07 5:56 am EST
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Online payroll and human resource software provider Paycom (NYSE:PAYC) will be reporting results tomorrow after market close. Here's what investors should know.

Last quarter Paycom Software reported revenues of $256.1 million, up 30.3% year on year, beating analyst revenue expectations by 2.34%. It was a decent quarter for the company, with a strong top line growth but a decline in gross margin.

Is Paycom Software buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Paycom Software's revenue to grow 23.5% year on year to $272.9 million, improving on the 14.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Earnings are expected to come in at $1.05 per share.

Paycom Software Total Revenue

The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 1.86%.

Looking at Paycom Software's peers in the finance and HR software segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Paycor delivered top-line growth of 20% year on year, beating analyst estimates by 3.56% and Paylocity reported revenues up 33.9% year on year, exceeding estimates by 4.11%. Paycor traded up 3.9% on results, Paylocity was up 10.2%. Read our full analysis of Paycor's results here and Paylocity's results here.

Triggered by the Federal Reserve's hawkish stance on interest rates, shares of technology companies have been facing sell-off in 2022 and while some of the SaaS stocks have fared somewhat better, they have not been spared, with share price declining 7.37% over the last month. Paycom Software is down 10.5% during the same time, and is heading into the earnings with analyst price target of $447.2, compared to share price of $325.76.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.